Labour’s plans to scrap letting agents fees could have backfired, says rental firm boss

Landlord Expert
By Landlord Expert June 4, 2014 12:06

Earlier this month Labour announced it was trying to force through an amendment to a Parliamentary Bill which would have drastically altered the rental market and could have restulted in tenants being left out of pocket.

Here, Luke Gidney, managing director of the award-winning letting agent, gives us his view.

“Someone somewhere in Labour’s head office obviously decided that this week’s way to try and make Ed Miliband popular was to make it seem as if he stands up for the many who live in rented accommodation.

“Not a bad idea.

“But to force an amendment to the Consumer Rights Bill to ban letting agents from charging fees to tenants?

“Very bad idea.

“Letting agents compete on price and on the quality of their service.

“As a result, tenants choose to deal only with the agent that matches their expectations. The fact that most do rent property from reputable agents such as ourselves and the many others around the country indicates that tenants feel they gain value for money.

“After all, if they don’t want to use letting agents they could easily rent from the private ads. But they choose not to.

“I believe that this is because they see using a letting agent as a way of making sure the property and the landlord have been checked out, that any repairs or necessary maintenance will be carried out quickly and to a high specification, that an established complaints procedure is in place if problems arise – and that all parties to the agreement are properly protected under law.

“Ed Miliband’s team may not be cynically ticking the box to make sure they have appealed torenters.

“They may actually believe they are trying to do something to help. The simple fact is they are not.

“Letting agents provide a service that tenants are prepared to pay for. If we remove letting agents’ ability to charge for this service it raises an important question: what will happen?

“To my mind, we will see rents pushed up as agents look to offset the loss of tenants fees by charging landlords more – who then claim this back by upping the rents.

“The alternative is that letting agents have to lay staff off. By my calculations, if each letting agent in Leeds lost two staff members that would mean around 320 job losses and agents trying to provide the same service with less people to do it.

At Let-Leeds we have been very vocal in our belief that all possible measures should be considered to protect tenants.

“I would not be against letting fees even being capped to a percentage of the monthly rent. But Labour’s plan seems to be an idea thought up in desperate haste to try and win votes. The party would be of far more use if it took the time to talk to those in the industry.

“We have always called for a licensing system for agents. Such a scheme would give far greater protection to tenants and landlords than Mr Miliband has ever considered.

“His lumbering in with a last-minute, headline-grabbing change to a government Bill with the sole aim of grabbing publicity and future votes does little for anyone but the media profile of the Labour Party.

“We have to make sure long-term tenants’ rights are put before short-term political gain.”

Luke Gidney is Director of Let-Leeds. If you have a view on this topic, please get in touch with the Yorkshire Evening Post at the usual address.

Landlord Expert
By Landlord Expert June 4, 2014 12:06

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